The Federal Trade Commission has launched an investigation
into Google’s $1 billion acquisition of Israeli company Waze, the New York Post
reported over the weekend. The FTC will look into possible anti-trust issues in
the deal.
According to the report, although the agreement was
finalized on June 11, Google believed it did not need to submit the deal for
review because Waze’s US revenue is less than $70 million.
The Internet search giant confirmed that the FTC was
reviewing the acquisition, but failed to provide any details on the investigation.
If the FTC concludes that Google must divest itself of Waze,
the NY Post said, Google most likely would have to take the potential loss in
re-selling the company. Yet the chances for such a development seem low:
Because of Google's strength in the market, regulators tend to thoroughly
review and probe each of its deals and moves – but deals have rarely been
canceled.
In January, for example, Google's acquisition of Motorola
for $12 billion was approved after a long FTC investigation process.
American experts estimated last week that the extent of the
deal would force US regulators to intervene and review it.
The New York Times quoted experts as saying that even if
Google could show that this deal did not decrease competition, the acquisition
could be unwound if Waze was found to meet Justice Department guidelines as a
“firm that plays a disruptive role in the market to the benefit of customers.”
According to those experts, Waze may well be such a firm, as there is no
company with a similar product.
The main concerns expressed by sources in the US over the
Google-Waze deal have to do with the search giant's growing strength in the
mapping and navigation field. Last week, an American consumer group demanded
that US antitrust agencies block the Google-Waze deal, saying it would harm
competition.
"Approval of the Waze deal can only allow Google to
remove any meaningful competition from the market. It will hurt consumers and
hinder technological innovation," the Consumer Watchdog organization said.
According to Consumer Watchdog's Privacy Project Director
John Simpson, "Google already dominates the online mapping business with
Google Maps. The Internet giant was able to muscle its way to dominance by
unfairly favoring its own service ahead of such competitors as MapQuest in its
online search results."
He added that the acquisition would also "allow Google
access to even more data about online activity in a way that will increase its
dominant position on the Internet."
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